Low Demand Leads Phenolic Resin Prices to Fall in Early September 2024
Low Demand Leads Phenolic Resin Prices to Fall in Early September 2024

Low Demand Leads Phenolic Resin Prices to Fall in Early September 2024

  • 16-Sep-2024 5:40 PM
  • Journalist: Rene Swann

The global Phenolic Resin market experienced a decline in prices during the first week of September 2024, extending the trend of declining prices seen throughout the prior months.  This downward trend was driven by weak demand from major downstream sectors such as paints, coatings, and wood adhesives, coupled with a lack of cost support from feedstocks phenol and formaldehyde.

In China, Phenolic Resin prices fell as a result of weak demand from downstream industries, particularly due to a slowdown in construction activities. New home sales by value fell 25% in the first eight months of the year compared to the previous year, according to the National Bureau of Statistics. The ongoing property crisis has led to reduced demand for construction materials, including Phenolic Resin. Further compounding this issue, trade tensions and barriers, including U.S. and European tariffs, along with trade restrictions imposed by countries like India and Malaysia on Chinese plastic products, have dampened market dynamics. Although China’s overall exports saw an increase in August, domestic demand remains subdued. Moreover, a decrease in phenol prices compared to the previous week has added to the downward pressure on Phenolic Resin.

In Europe, Phenolic Resin prices declined amid oversupply and weak downstream demand. The real estate market in Europe continued to struggle, with declining home sales reflecting persistent market weakness. New orders in the manufacturing sector have been weak, contributing to a slow growth trajectory for Phenolic Resin. Additionally, purchasing activity declined as manufacturers held sufficient stocks, indicating hesitancy within the market due to economic uncertainties. Falling phenol prices have further pressured Phenolic Resin prices.  European construction sector posted its 29th consecutive month of declining activity. Rising input costs and cautious market behavior have deepened the contraction, leading to limited transactions and low market offers.

The USA also witnessed a decline in Phenolic Resin prices, driven by sluggish demand and oversupply. The construction sector remained a key factor, with construction spending falling by 0.3% in August. Weak new orders and sluggish procurement contributed to a cautious market environment, with manufacturers maintaining ample raw material stocks. This, coupled with a decline in phenol prices, resulted in additional downward pressure on Phenolic Resin prices. Limited Phenolic Resin transactions and a lack of inquiries from the downstream market underscored the challenges faced by the industry in North America. Overall, the global Phenolic Resin market remains under pressure due to weak downstream demand, oversupply, and declining feedstock costs. The ongoing economic uncertainties across major regions further cloud the outlook for this market.

According to ChemAnalyst, Phenolic Resin prices are anticipated to rise in the coming weeks. In APAC, procurement activities are expected to increase ahead of China's National Day holiday closures. In Europe, the manufacturing sector's expansion post-August holidays is likely to drive higher demand. Meanwhile, in the USA, reduced production due to Hurricane Francine is expected to impact downstream demand for the product.

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